What happens normally is that the record label–EMI in this case–cuts the deal with ITunes. Then they receive payments, or royalties, and distribute them to the artist and the music publisher. In a normal deal, EMI would be receiving money from ITunes on Beatles downloads, then sending them to Sony/ATV Music and to the Beatles’ company, Apple Corps (separate from ITunes’ Apple).

However, in this deal, EMI is the last to get paid. They have to wait for the Beatles to receive their money from ITunes. Then Apple Corps pays EMI. ITunes is also paying Sony/ATV directly all its music publishing royalties.

By doing it this way, the Beatles are likely receiving a higher royalty than if EMI were paying them. And so far the Beatles have sold hundreds of thousands of downloads on ITunes since they announced the deal a month ago. Still on the ITunes bestsellers chart are “Abbey Road,” “Sgt. Pepper,” the White Album, the red and blue greatest hits albums, and the Beatles box set.

ITunes/Apple, says my source, does not want this story getting out. “They don’t want to have to negotiate individually with every artist. This could be precedent setting.”

It’s also precedent setting for EMI, which is in dire financial shape and doesn’t have much leverage with anyone. There’s now speculation that EMI’s deal with Pink Floyd might be similar. Pink Floyd sued EMI and won over allowing downloads of their concept albums like “Dark Side of the Moon” in pieces. Now that Pink Floyd has finally re-signed their catalog to EMI, sources say that soon we won’t be able to download individual tracks from those albums. It’s unclear how ITunes will pay Pink Floyd–through EMI or their own company.

Author

Roger Friedman began his Showbiz411 column in April 2009 after 10 years with Fox News. He writes for Parade magazine and has written for Details, Vogue, the New York Times, Post, and Daily News and many other publications. He is the writer and co-producer of "Only the Strong Survive," a selection of the Cannes, Sundance, and Telluride Film festivals.